Business is slowing down

I am sitting under an umbrella outside a Peets Coffee shop on my super-light Macbook connected to free wifi with access to all my apps and content through a browser – on a public holiday.

I am at work whilst waiting for my son to finish his flute lesson. Now, “at work” is an activity and no longer a location or time in the day. This is explored in a recent article “Daddy are you still at work“.

I can buy almost anything online and get it delivered the next day.

I can stay in touch to friends, family and work colleagues no matter where in the world they live. It is easy to connect and collaborate.

I am living in the digital revolution. Life is so much better than 10, 20, 30 or 50 years ago. Businesses are so much more efficient now that information flows freely across corporate, department and organizational boundaries.

Or is it ? The research tells a very different story.

Global business trends

The nature of business is changing and it is making companies more complex to run, with far less margin:

Global competition: now buyers have access to the same information so that virtually every business has global competition.

Work is subcontracted: to reduce cost or increase capability, work is delivered by 3rd parties and this impacts the end to end process and therefore customer experience.

More compliance: to protect employees and customers, more and more regulatory compliance is imposed on companies.

Buyers have higher expectations; they want to connect on the device and channel of their choice, expect immediate answers and exceptional customer service – all at rock-bottom prices.

The only winners in this digital revolution are the investors and founders of those businesses that have used the digital upheaval to become the monopolistic player and exploit their dominant position.

Business is getting slower and less fun

The research from CEB, a best-practice insight and technology company headquartered in Arlington, Va. has some stark – and rather disappointing – figures:

“In benchmarking the speed of key processes across the corporate sector, we find again and again that decision-making at even the most basic level has slowed materially over the past five to 10 years.”

In last 5 years, hiring a new employee now takes 63 days, up from 42. B2B sales take 22% longer as sales teams now need to get consensus from 5 buyers, rather than 2 just 5 years ago.

We all recognize that there is a cost overhead in increasing regulations, but probably haven’t understood the true impact. Risk management functions are now 900% larger than 10 years ago. And the increase in size and number of regulatory regimes has the added kicker that there is less coordination as companies struggle to comply to the different regulatory regimes. A process-oriented approach to business operations could provide a single, integrated way of providing regulatory compliance – as a by-product of a well run business.

Friction kills staff motivation

But the biggest issue for company efficiency and employee motivation is 60% of staff need to consult with 10 people to get the job done and 30% need to consult with over 20. It is just tougher to get stuff done inside companies, and this has a knock on effect on staff morale.

On days when workers have the sense they’re making headway in their jobs, or when they receive support that helps them overcome obstacles, their emotions are most positive and their drive to succeed is at its peak. On days when they feel they are spinning their wheels or encountering roadblocks to meaningful accomplishment, their moods and motivation are lowest. This comes from research from the Harvard Business Review.

Boring, but true. Fix your processes

CEB’s recommendations point to the value of process redesign: “It would be foolish to suggest that the root causes of our current business slowdown—greater scale and greater focus on risk management—are in and of themselves bad things. Hardly. But leaders do need to design organizations and processes to take into account—and offset—the various choke points that technology and organizational evolution have created. Even at the largest and most traditional corporations, collaboration and streamlining don’t have to be at odds.”